2a_Heiman_TanChocChina[1] - CHOCOLATE IN CHINA DETERMINANTS...

1CHOCOLATE IN CHINA:DETERMINANTS OF WESTERN BRAND LOYALTYBruce A. Heiman (Corresponding author)San Francisco State UniversityLan TangSan Francisco State UniversityAccepted for publication (forthcoming) byJournal of Global Commerce Research(do not cite or quote without authors’ permission)Chocolate in China: Determinants of Western Brand LoyaltyAbstractWe explore empirically, using quantitative methods, factors affecting Chinese consumer loyalty for westernchocolate brands. A convenience sample of subject matter experts was surveyed from China’s Shanghai region.Following a descriptive analysis of the sample, survey responses (Likert-type scales) were analyzed using ordinaryleast squares (multiple) regression.Our findings show that increasingly (1) marketing chocolate for gifts, and (2)distributing chocolate through supermarket predict increased loyalty to western brands.We offer insight for foreignmanagers and manufacturers interested in succeeding as exporters to China’s relatively nascent, but potentiallycolossal, retail market for chocolate.1. IntroductionFour primary marketing strategies are used in China by western chocolate manufacturers. The first strategytailors chocolate to the local gift culture (used, for example, by Dove Chocolate). The second strategy providesconsumer education (Cadbury Chocolate). The third emphasizes targeting youth (Kit Kat). The fourth focuses onpartnering with local distributors (House of Brussels Chocolates). Some companies adopt multiple strategies toachieve competitive advantage. There is little agreement which strategy works best. Many argue new distributionchannels (supermarkets) are the best competitive weapon (Beijing Review, 2007), while some suggest new productdevelopment is the best approach (China Daily, 2004). Using survey data from 51 industry experts in Shanghai, wetest for the effects of three established approaches (focusing on chocolate for gifts, use of supermarket distributionand increasing holiday marketing efforts) to explore how western chocolate can best build brand loyalty in theChinese retail chocolate market.This paper proceeds by first providing a market overview of chocolate in China, (cultural and the competitivelandscapes). We next argue for three testable hypotheses, and then describe our methodology, sample data andvariable construction. We then present the results of a rigorous, controlled multiple regression model. We conclude

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2with the implications of our findings, issues, and future research possibilities. Our goal is to make a modestexploratory contribution to understanding what factors determine western brand loyalty among Chinese consumers.We offer a substantial descriptive background in order to provide a context for understanding potential managerialactions hinted at by our findings.

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